USDT holdings on Ethereum rose during 2024, but smart contract holdings stalled, according to data from the Bank for International Settlements.

Description: A Bank for International Settlements paper says USDT grew on Ethereum without sustained smart-contract balance growth.
Tags: USDT, DeFi, Ethereum, Tron, stablecoins
Featured image: AI-generated abstract fintech visual of token balances and network lines, no real people, exchange logos, or price figures.

A Bank for International Settlements working paper published on September 15, 2026 found that the supply of USDT rose on Ethereum without a lasting expansion in USDT parked in smart-contract accounts. On Tron, such accounts remained at roughly 1% of USDT for most of the period covered. The combined result weakens a common shortcut: treating a bigger stablecoin supply as automatic evidence of fresh capital entering DeFi.

The data measures location, not intent

The paper follows token balances rather than holder reasons. The study's holder-balance chart ends before 2026, so its shares describe historical periods rather than September 2026 conditions. That distinction matters because current dashboards continue to show large USDT balances on both networks.

For Ethereum, smart-contract accounts held more than 20% of the network's USDT during part of 2021 and 2022. The contract-held share stayed near 15% to 20% until late 2024, then slipped to about 10% to 15% as the supply grew. The authors frame this as a proportion shift, not as evidence that the dollar amount inside contracts kept shrinking. The key finding is that new issuance did not produce a lasting rise in contract-held balances.

Shares can shrink even when contract balances hold steady

A falling share can occur when new USDT builds up in non-contract addresses while contract-held amounts remain close to prior levels. The Ethereum series illustrates the split: as issuance rose, much more USDT appeared outside contracts, while contract-held balances did not show a comparable lasting climb. For readers, that makes percentage change alone a weak clue about whether dollars have left DeFi.

Figure 10 of the study places Ethereum contract-held USDT at roughly $10 billion to $15 billion toward the end of its plotted period. Tron's contract-held USDT sits around $1 billion or less. These are approximate chart values. Ethereum's dollar balance fluctuated in the low tens of billions while the share shrank; on Tron, contract balances remained a small slice of a much larger supply. The two percentages use different chain-specific denominators and cannot be treated as one measure of DeFi adoption.

The method follows tokens instead of protocol deposits

The researchers rebuilt holdings by tracking USDT transfer event logs on Ethereum and Tron. They identified smart-contract accounts from contract deployments, classified other addresses as externally owned accounts, and cross-checked token supply against mint, burn and blacklist-destruction events. Tracking one token across addresses avoids the double-counting that can arise when protocol-reported deposits are simply added together.

Protocol-level total value locked measures assets assigned to particular DeFi applications. The reconstruction instead follows one token across addresses on two networks, including balances outside those applications. It answers how USDT is divided between account types, while protocol total value locked describes the scale of selected venues. Neither method turns a balance into a verified description of the holder's purpose.

Account type is still an imperfect signal of use

A smart contract may hold USDT for a bridge, wrapper or custodian rather than for a lending or trading strategy. An externally owned address may be used for payments, savings, remittances or exchange custody. Therefore Tron's roughly 1% contract-held share does not show that the remaining tokens were spent as payments. Nor does Ethereum's falling share prove that DeFi use contracted.

The current scale makes the question harder to ignore. When checked on September 28, DefiLlama showed about $183.7 billion in USDT market capitalization across chains, including about $73.3 billion on Ethereum and about $92.5 billion on Tron. Those figures are a later, third-party supply snapshot, not an update of the Bank for International Settlements holder breakdown. They cannot show whether today's tokens sit in DeFi contracts, exchange wallets or other accounts.

Supply growth needs a different proof for DeFi claims

A current claim about DeFi deployment would require a current breakdown of balances in identified DeFi contracts on each chain, with bridges and custody separated where possible. The historical percentages in the working paper cannot supply that update. Rising USDT totals, by themselves, establish neither more DeFi deployment nor more payments, and they say nothing about demand for ETH or TRX.

The paper also arrives amid related CryptoSlate coverage that had already questioned whether a $20 billion DeFi surge was largely a price-inflation effect, whether Visa cutting reported stablecoin volume proved payments fell, and whether Tron's $30 trillion lifetime volume could become a trap. For readers, the practical takeaway is narrower: supply data can show where tokens rest, but it cannot confirm how they are being used.